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17 May, 13:22

Last year, Stephen Company had 20,000 units in its ending inventory.

During the year, Stephen's variable production costs were $12 per

unit. The fixed manufacturing overhead cost was $8 per unit in the

beginning inventory. The company's net income for the year was $9,600

higher under variable costing than it was under absorption costing.

Given these facts, the number of units of product in the beginning

inventory last year must have been:

a. 21,200.

b. 19,200.

c. 18,800.

d. 19,520

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Answers (1)
  1. 17 May, 16:28
    0
    D) 19,520

    Explanation:

    The company uses a last-in-first-out (LIFO) inventory flow assumption. Given these facts, the number of units of product in the beginning inventory last year must have been:D) 19,520
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